ABSTRACTCaenorhabditis eleganslarval development requires the function of the two Canal-Associated Neurons (CANs): killing the CANs by laser microsurgery or disrupting their development by mutating the geneceh-10results in early larval arrest. How these cells promote larval development, however, remains a mystery. In screens for mutations that bypass CAN function, we identified the genekin-29,which encodes a member of the Salt-Inducible Kinase (SIK) family and a component of a conserved pathway that regulates variousC. elegansphenotypes. Likekin-29loss, gain-of-function mutations in genes that may act upstream ofkin-29or growth in cyclic-AMP analogs bypassedceh-10larval arrest, suggesting that a conserved adenylyl cyclase/PKA pathway inhibits KIN-29 to promote larval development and that loss of CAN function results in dysregulation of KIN-29 and larval arrest. The adenylyl cyclase ACY-2 mediates CAN-dependent larval development:acy-2mutant larvae arrested development with a similar phenotype toceh-10mutants, and the arrest phenotype was suppressed by mutations inkin-29. ACY-2 is predominantly expressed in the CANs, and we provide evidence that theacy-2functions in the CANs to promote larval development. By contrast, cell-specific expression experiments suggest thatkin-29acts in both the hypodermis and neurons, but not in the CANs. Based on our findings, we propose that cAMP produced by ACY-2 in the CANs acts in neighboring neurons and hypodermal cells where it activates PKA and inhibits KIN-29 to promote larval development. We discuss how this conserved pathway could be partitioned between two cells.</jats:p